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CLT UPDATE
Wednesday, December
7, 2016
Tax hikes again "on the table"
|
Governor Charlie Baker said Tuesday that he
is unilaterally slashing $98 million from the state budget
to remedy what his administration says is a gap between
projected revenue and authorized spending.
Cuts will touch a wide swath of government
programs. They include health care for the poor, suicide
prevention, the State Police crime laboratory, literacy
programs, state parks, and the Bureau of Substance Abuse
Services. But the total amount of spending being axed is
small compared to the $39 billion budget.
The move immediately drew blowback from the
Democratic-controlled Legislature....
Baker vetoed $265 million when he signed the
budget in July. But the Legislature restored $231 million of
that spending by overriding many of his vetoes. Many of the
cuts made Tuesday were items Baker had vetoed during the
summer.
And the majority of the spending slashed
Tuesday is what the Baker administration characterized as
“earmarks,” pet projects inserted into the budget by
lawmakers....
The GOP administration cited the veto
overrides and less-than-expected revenue and said several
programs, like the state’s massive Medicaid program for the
poor and the Department of Correction, are going to need
more funding to maintain services.
“Today, we are acting to put the budget back
in balance for the hardworking people of Massachusetts as
provided under 9C authority in response to softening
revenues, unavoidable spending deficiencies, and the
Legislature’s decision to restore spending above the
administration’s signed balanced budget,” Kristen Lepore,
Baker’s budget chief, said in a statement.
The Boston Globe
Wednesday, December 7, 2016
Governor Baker to cut $98 million to close state budget gap
Lurching from one budget problem to another,
Gov. Charlie Baker acted Tuesday to cut $98 million from the
$39.25 billion state budget in an effort to match up
sluggish state revenues with likely spending, including
accounts he says the Legislature underfunded....
Administration officials for months have
warned that spending needed to be scaled back because
revenues are tight and some major accounts were underfunded
in the budget that the Democrat-controlled Legislature sent
to the governor in July.
The governor opted against a major pruning
of state spending in October when his team took other
actions to address a nearly $300 million budget gap, but
Baker said Tuesday he was unwilling to wait until January to
make spending cuts, as he did last year. House and Senate
leaders Tuesday immediately pushed back against Baker's
decision, calling it "premature" and "not necessary." ...
Baker vetoed $265 million in spending when
signed the fiscal 2017 budget in July. The Legislature
restored $231 million of those reductions by overriding the
governor's cuts in a spasm of votes taken in late July.
State House News Service
Tuesday, December 6, 2016
Baker slashes spending, legislative leaders say cuts
premature
This is
how budgeting works in the Legislature with a
Republican governor. The Legislature passes a
bloated budget that everyone recognizes is not
affordable. The governor vetoes as much of the
over-spending as he thinks he can get away with,
only to have his vetoes overridden by the Democrat
Legislature. Legislators run back to their districts
to crow about what a wonderful job they did bringing
home the bacon. They know they've overspent when
they send out their self-congratulatory press
releases, but most constituents won't until too
late, if at all. When and if the voters realize the
budget had to be cut, the Beacon Hill big-spenders
will blame the "heartless" governor.
CLT Update
Commentary by Chip Ford
Tuesday,
August 30, 2016
"Budget gap" has "easy fixes" for those honestly
seeking them
PAY HIKES FOR HOUSE LEGISLATIVE STAFFERS
— On Thanksgiving eve, House
Speaker Robert DeLeo's office announced that 468 House
employees will receive a 6 percent pay raise that will cost
$1.3 million.
—Seth Gitell,
Speaker DeLeo's Director of Communications, told Beacon Hill
Roll Call, "House of Representatives employees received
salary adjustments based on a two-year annual 3 percent COLA
factor. The adjustments will be supported by existing
appropriations. The last COLA received by House employees
was in 2014."
—Chip Ford,
Executive Director of Citizens for Limited Taxation,
responded, "Apparently they think President-elect Trump's
promise to turn around the nation's economic malaise begins
with them."
Beacon Hill Roll Call
Sunday, December 4, 2016
Quotes of Note
By Bob Katzen
Consider this a helping of Thanksgiving news
dump leftovers.
You may have missed it, but House Speaker
Bob DeLeo announced the day before the holiday that staffers
at the State House are set to receive a pay bump amounting
to around $1.3 million.
The raise is a cost of living increase of
about 6 percent for employees working in the House of
Representatives (of which there are 468), DeLeo’s office
said Wednesday. The last such pay increase came in 2014.
“House of Representatives employees received
salary adjustments based on a two-year annual 3%
Cost-of-Living-Adjustment factor. The adjustments will be
supported by existing appropriations,” says spokesman
Whitney Ferguson, in a statement to the State House News
Service....
Chip Faulkner of Citizens for Limited Taxation
says a pay bump is “not right in this climate,” while Noah
Berger of the Massachusetts Budget and Policy Center says
“paying people a reasonable salary is important to attract
good people to do important work.”
Boston Magazine
Monday, November 28, 2016
Pay Raises Are Coming to the State House
A $1.3 million bump is on the way for House staffers
Staff at the Massachusetts House of
Representatives will receive a 6 percent pay raise - their
first in two years - and local lawmakers say the wage hike
is long overdue, despite concerns about a looming budget
deficit.
"The individuals who work in the Statehouse
are loyal hard-working people devoted to serving the
citizens of Massachusetts," Rep. Betty Poirier said of the
cost of living raise announced last week by House Speaker
Robert DeLeo....
Rep. Paul Heroux, D-Attleboro, agreed the
pay raise was needed.
"Normal cost-of-living increases are
important for anybody, whether they are in the public
sector, the private sector or even in retirement," Heroux
said.
The Sun-Chronicle
Thursday, December 1, 2016
Attleboro area legislators say House staff raises warranted
If you owned a business and were facing
financial problems, would you be handing out raises?
Probably not, but that's exactly what
Massachusetts House Speaker Robert DeLeo did.
On the day before Thanksgiving - when the
Statehouse was virtually vacant - DeLeo's office announced
that the 468 employees who work for the Massachusetts House
of Representatives would be receiving 6 percent
"cost-of-living" raises. The $1.3 million expense will be
covered by the $40.2 million House budget, DeLeo's office
said.
What DeLeo didn't say is that the state is
facing a nearly $300 million deficit. Handing out hefty
raises - Social Security recipients will only be getting a
0.3 percent cost-of-living increase for 2017 - in the midst
of cutbacks is just not right....
The timing of the raises troubled some
budget watchdogs.
"Considering they've got a budget shortfall
and they're crying about, 'Where are we going to get the
money,' to come out with a 6 percent raise is just not right
in this climate," said Chip Faulkner of Attleboro and
the Citizens for Limited Taxation....
Even worse, in our view, is the message that
people close to the center of power - and the House speaker
has long been considered one of the most powerful people on
Beacon Hill - reap rewards while others lose their jobs. Our
representatives' response also leaves an impression of
legislators who dare not oppose the speaker for fear of
retaliation.
It's not the way you'd run a business, but,
unfortunately, it's the way our state government has been
run for years.
A Sun-Chronicle
editorial
Monday, December 5, 2016
Pay raises send wrong message
In 2009 lawmakers raised the sales tax. Four
years later, tax hikes increased the cost of gasoline and
tobacco. Could 2017 be the year for the next tax hikes?
As the fiscal 2018 budget season kicked off
with a revenue outlook hearing on Monday, state officials
with broad power over state tax policy did not rule out tax
increases, and expressed a range of perspectives on the
idea....
After the same hearing for the fiscal 2018
budget on Monday, where officials predicted a continuation
of sluggish growth in tax revenues, the Haverhill Democrat
declined to take a stand against new taxes - a stance
Speaker DeLeo underlined.
"No decision has been made in terms of
additional or other forms of revenue," DeLeo told reporters.
He said, "I'm not ruling out anything." ...
Senate Ways and Means Chairwoman Karen
Spilka said tax increases should be talked about in the
future.
"We haven't even gone down there," Spilka
told the News Service. She said, "That's something that all
of us will have to discuss, but that's not something that
we're talking about now by any means."
Gov. Charlie Baker, a Republican working
with a Democrat-controlled Legislature, said he hoped to
steer state policymakers away from tax increases.
"I'm going to do the best I can to talk my
colleagues in the Legislature out of raising taxes. I think
we need to get our budget structurally aligned and
balanced," Baker told reporters on Monday....
In her opening statement at the revenue
hearing, Spilka said the state had foregone nearly $600
million in revenue in the past two years because of
statutorily mandated, economically triggered decreases in
the income tax rate.
The Department of Revenue estimated that the
income tax rate will drop from 5.1 percent to 5.05 percent
on Jan. 1, 2018, resulting in an $83 million reduction in
state tax collections over the second half of fiscal 2018.
State House News Service
Monday, December 5, 2016
Tax hikes not ruled out as budget process begins for Fiscal
2018
Like mechanics puzzled by a car that runs
just fine but struggles to get up to speed on the highway,
budget writers got under the hood of the state budget Monday
morning, trying to discern what they need to do to ensure
their spending plans stay on the road in fiscal 2018.
Despite the lowest unemployment rate in 15
years, and heightened consumer and business confidence,
state budget managers have had to scramble this fiscal year
and last to adjust as state tax collections have not lived
up to initial projections amid a slow-growing economy.
"Do we have any better idea as to why some
of this is happening in an economy, particularly for
Massachusetts, that is doing, by all indications, well?"
Sen. Karen Spilka, the Senate chair of the Ways and Means
Committee, asked at the outset of the hearing. "I mean,
you'd think that we would be doing well with withholdings
and sales tax and corporate, with the business confidence
the way it is."
The hearing Monday by the Joint Committee on
Ways and Means and the Executive Office of Administration
and Finance was held to answer questions like Spilka's and
ascertain the availability of tax revenues for fiscal 2018
budget-building purposes....
According to the DOR, its estimate assumes
the income tax rate will drop from 5.1 percent to 5.05
percent on Jan. 1, 2018, resulting in an $83 million
reduction in state revenue. Recent economic growth was not
significant enough to statutorily trigger an income tax cut
on Jan. 1, 2017.
State House News Service
Monday, December 5, 2016
Lots of change, but experts see one consistency: Slow
revenue growth
Massachusetts’ EBT card holders are spending
welfare cash in all 50 states, Puerto Rico and the Virgin
Islands, while patronizing or at least accessing ATMs in
liquor and tobacco stores, beauty salons and tattoo parlors.
In response to my public records request,
the state’s Department of Transitional Assistance (DTA)
turned over 18 months of EBT records from Jan. 1, 2015, to
July 1, 2016.
In all, the taxpayers shelled out $321
million in Temporary Assistance to Needy Families (TANF) to
welfare recipients.
In the 18-month period, more than $7.3
million in Bay State welfare funds were spent outside the
state, including $2.4 million in New Hampshire, $780,000 in
Connecticut and $549,000 in the Sunshine State of
Florida....
State Rep. Shaunna O’Connell (R-Taunton) has
long campaigned in the Legislature against welfare fraud and
abuse.
“I continue to advocate for an end to
out-of-state usage and to limit cash access,” she said.
“Taxpayer-funded EBT cards should not be paying for
vacations. The state should revoke cards used out of state.”
The Boston Herald
Wednesday, December 7, 2016
Have funds, will travel for those on the dole
By Howie Carr
|
|
Chip Ford's CLT
Commentary
In the CLT Update of Tuesday, August 30th (" 'Budget
gap' has 'easy fixes' for those honestly seeking them") I wrote:
This is how
budgeting works in the Legislature with a Republican governor. The
Legislature passes a bloated budget that everyone recognizes is not
affordable. The governor vetoes as much of the over-spending as he
thinks he can get away with, only to have his vetoes overridden by the
Democrat Legislature. Legislators run back to their districts to crow
about what a wonderful job they did bringing home the bacon. They know
they've overspent when they send out their self-congratulatory press
releases, but most constituents won't until too late, if at all. When
and if the voters realize the budget had to be cut, the Beacon Hill
big-spenders will blame the "heartless" governor.
That's Step One in how budgeting works in the Legislature. As night
follows day, Step Two is just a predictable. Once the over-spending has
been accomplished and the hole has been dug deep, next comes the call for higher
taxes to fund all the unaffordable "unmet needs."
On Monday, the State House News Service reported:
In her opening statement at
the revenue hearing, [Senate Ways and Means Chairwoman Karen
Spilka] said the state had foregone nearly $600 million in
revenue in the past two years because of statutorily mandated,
economically triggered decreases in the income tax rate.
The Department of Revenue
estimated that the income tax rate will drop from 5.1 percent to
5.05 percent on Jan. 1, 2018, resulting in an $83 million
reduction in state tax collections over the second half of
fiscal 2018.
Note how the denizens of Bacon Hill think.
Sen. Spilka refers to the state's illicit gains achieved by
deception and thumbing their noses at the voters' 2000 ballot
mandate, derived from the Legislature's 27-year broken promise
— the promise that the 1989 income tax
hike would be only "temporary," only for "18-months."
They took money from taxpayers under a false promise and, as far as
they're concerned, it's theirs now.
How can the state "forego" something that it should not have, that
doesn't belong to them and hasn't for now almost three decades?
In 2000, on CLT's binding referendum the voters overwhelmingly
ordered their "representatives" to finally roll back that "temporary"
income tax hike from 5.85 percent to 5 percent by 2003. In 2002 the
Legislature "temporarily froze" the rollback at 5.3 percent in what was then the
largest tax
increase in state history. This was done to fund a $22.9 billion
Fiscal Year 2003 budget — that has since grown by
$16 billion to $39 billion this fiscal year. The Department of Revenue now
estimates that in 2018 — eighteen years
after the voters' mandate and twenty-seven years after the "temporary"
promise was made —
the income tax rate might reach 5.05 percent, with the voters' mandated 5
percent still somewhere over the horizon.
"Screw the voters and their silly 'mandates'" is far too many
legislators' mindset.
Meanwhile the Bacon Hill spending games go on: Pay raises
for insiders, unchecked welfare abuses by the Takers —
and for us, yet more tax hikes under consideration.
|
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|
Chip Ford
Executive Director |
|
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|
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The Boston Globe
Wednesday, December 7, 2016
Governor Baker to cut $98 million to close state
budget gap
By Joshua Miller
Governor Charlie Baker said Tuesday that he is
unilaterally slashing $98 million from the state
budget to remedy what his administration says is
a gap between projected revenue and authorized
spending.
Cuts will touch a wide swath of government
programs. They include health care for the poor,
suicide prevention, the State Police crime
laboratory, literacy programs, state parks, and
the Bureau of Substance Abuse Services. But the
total amount of spending being axed is small
compared to the $39 billion budget.
The move immediately drew blowback from the
Democratic-controlled Legislature.
House Speaker Robert A. DeLeo said the cuts are
“premature,” as tax revenues are about on track
with expectations. (As of November, they were
0.2 percent below projections.)
“It seems that the administration is seeking to
achieve policy objectives that have previously
been rejected by the Legislature through its
unilateral use of 9C cuts,” DeLeo said,
referring to the section of law that gives Baker
the authority to make cuts without lawmakers’
sign-off. “Recent revenue numbers indicate a
need to be vigilant; they do not, however,
necessitate cuts at this time.”
Baker vetoed $265 million when he signed the
budget in July. But the Legislature restored
$231 million of that spending by overriding many
of his vetoes. Many of the cuts made Tuesday
were items Baker had vetoed during the summer.
And the majority of the spending slashed Tuesday
is what the Baker administration characterized
as “earmarks,” pet projects inserted into the
budget by lawmakers.
Senator Karen E. Spilka, an Ashland Democrat who
is the chamber’s budget chief, said Baker’s cuts
will have real consequences for cities and towns
struggling with opioid addiction and housing.
“Governor Baker’s action today cuts important
programs, including approximately $6 million in
reductions to homelessness and housing, $1.9
million in cuts to substance abuse prevention
programming, $900,000 in cuts to HIV/AIDS
prevention and treatment services, and $400,000
in cuts to services for terminally ill
children,” she said.
So why the cuts?
The GOP administration cited the veto overrides
and less-than-expected revenue and said several
programs, like the state’s massive Medicaid
program for the poor and the Department of
Correction, are going to need more funding to
maintain services.
“Today, we are acting to put the budget back in
balance for the hardworking people of
Massachusetts as provided under 9C authority in
response to softening revenues, unavoidable
spending deficiencies, and the Legislature’s
decision to restore spending above the
administration’s signed balanced budget,”
Kristen Lepore, Baker’s budget chief, said in a
statement.
And the cuts may not be the last for this fiscal
year, which runs from July through the end of
June 2017.
Eileen McAnneny, president of the
business-backed Massachusetts Taxpayers
Foundation, said this fiscal year has been
particularly challenging.
She cited a budget that did not fully account
for known costs, such as funding for lawyers for
indigent defendants; higher-than-expected costs
for the Medicaid program; and
lower-than-expected revenue growth.
“So it is not unexpected that the administration
took action to actively manage this deficit,”
McAnneny said. “It is unclear whether these
latest actions will be adequate, given the many
fiscal uncertainties that remain.”
State House News Service
Tuesday, December 6, 2016
Baker slashes spending, legislative leaders say
cuts premature
By Matt Murphy
Lurching from one budget problem to another,
Gov. Charlie Baker acted Tuesday to cut $98
million from the $39.25 billion state budget in
an effort to match up sluggish state revenues
with likely spending, including accounts he says
the Legislature underfunded.
Baker slashed funding for health care, the State
Police, municipal regionalization, parks and
recreation, senior care and eliminated funding
for a postpartum depression pilot program, a
Down Syndrome clinic and a suicide prevention
account. The largest cuts came from MassHealth
fee-for-service payments and the Massachusetts
Office of Travel and Tourism budget, while the
smallest cut of $10,000 was for elder home care
purchased services.
Administration officials for months have warned
that spending needed to be scaled back because
revenues are tight and some major accounts were
underfunded in the budget that the
Democrat-controlled Legislature sent to the
governor in July.
The governor opted against a major pruning of
state spending in October when his team took
other actions to address a nearly $300 million
budget gap, but Baker said Tuesday he was
unwilling to wait until January to make spending
cuts, as he did last year. House and Senate
leaders Tuesday immediately pushed back against
Baker's decision, calling it "premature" and
"not necessary."
"It's pretty clear that with the deficiencies we
need to fund - court-ordered attorneys, snow and
ice, emergency assistance, stuff that I think
there's general agreement that we're going to
need to pay for - and the downturn that we've
all seen in revenue despite the success of our
economy that we needed to take action at this
time," Baker told the News Service after a
meeting with GOP lawmakers.
In total, 140 programs and accounts in the
budget were reduced, including the elimination
of a $2 million "Big Data and Innovation
Workforce" fund, money for digital health
internships, and a computer science education
initiative.
While tax revenues are fairly closely tracking
benchmarks, the governor exercised his emergency
powers to trim $53 million in earmarks, $17
million from administrative accounts, $6 million
from MassHealth and $21 million from other areas
of the budget to bring spending in line with
anticipated revenues.
After what Baker described as "pretty soft" tax
collections in November that put the state $22
million below revenue benchmarks five months
into the fiscal year, the governor said he moved
to trim spending to address "softening revenues,
unavoidable spending deficiencies, and the
Legislature's decision to restore spending above
the administration's signed balanced budget."
The governor's budget office listed the areas of
exposure in the current budget as a $10 million
deficiency in pharmacy revenues, $25 million
needed for the sheriffs, $20 million for
MassHealth, $15 million in human service
provider salary costs, $15 million for the
Department of Corrections, $8 million in
collective bargaining obligations and $5 million
for the Department of Mental Health.
House Speaker Robert DeLeo immediately responded
to Baker's cuts by calling it "premature" to
make spending cuts only five months into the
fiscal year.
"The House is proud of its tradition of fiscal
prudence and we remain confident that our work
to trim the FY17 budget following passage of
both the House and Senate budgets reflects a
responsible and economically sound response,"
DeLeo said in a statement. "It seems that the
Administration is seeking to achieve policy
objectives that have previously been rejected by
the Legislature through its unilateral use of 9C
cuts. Recent revenue numbers indicate a need to
be vigilant; they do not however necessitate
cuts at this time."
Baker vetoed $265 million in spending when
signed the fiscal 2017 budget in July. The
Legislature restored $231 million of those
reductions by overriding the governor's cuts in
a spasm of votes taken in late July.
House Ways and Means Committee Vice-chairman
Rep. Stephen Kulik of Worthington said DeLeo was
right.
"I agree with @SpeakerDeLeo these cuts not
necessary & threaten important services in our
communities #westernMA #mapoli," Kulik tweeted.
A spokesman for House Ways and Means Committee
Chairman Brian Dempsey said only that the
Haverhill Democrat's office was reviewing the
information.
Baker suggested that he tried being deferential
to the judgment of the Legislature last year,
and it didn't work out.
"Last year, in deference to the Legislature, we
waited until January before we made these
decisions and spent a good part of the second
half of the fiscal year chasing that revenue
debt number down because it came four hundred
and fifty million below the estimate at that
point in time. That's not the right way to do
this," Baker said.
Senate Ways and Means Chairwoman Karen Spilka
said that despite the November shortfall revenue
collections "remain on track." She lamented the
$6 million reduction for homelessness prevention
and housing, $1.9 million in cuts for substance
abuse prevention programming, $900,000 in cuts
to HIV/AIDS prevention and treatment and
$400,000 in cuts for services to terminally ill
children.
"The governor is shifting important funding away
from the priorities of the Legislature in favor
of his own. These cuts will have real
consequences on all the communities of the
Commonwealth struggling with opioid addiction
and housing and should not be made at this
time," Spilka said in a statement.
Baker administration and legislative budget
writers in January expected fiscal 2017 revenues
to climb 4.3 percent to $26.9 billion but actual
collections faltered and in the spring officials
sharply reduced their estimate to $26.231
billion. In October Administration and Finance
Secretary Kristen Lepore dropped the estimate
again, to $26.058 billion. The new estimate
reflects 3.1 percent growth, or $789 million,
above fiscal 2016 collections.
Collections over the first five months of the
fiscal year are up 2.2 percent.
Total fiscal 2016 spending, which is also backed
by federal revenues and state fees, was $38.4
billion.
This year's budget called for $39.25 billion in
spending, although Lepore in mid-October
announced she planned to reduce executive branch
spending by 1 percent in part by achieving $25
million in payroll savings by offering cash
incentives to get state workers to retire.
In late October, Lepore said Baker would hold
off on making unilateral budget cuts to address
a budget gap she estimated at $294 million. Her
office announced it could close the shortfall
with "trust sweeps, settlements, non-tax
revenue, smaller transfers (determined via
statutory formula) to authorities due to the
lower sales tax projection, and payroll
savings."
In recent financial disclosure statements, state
officials wrote that trust balances were
"unneeded" and available to balance the state
budget. According to Administration and Finance
spokesman Garrett Quinn, Baker administration
officials are sweeping funds from 12 accounts
with an aggregate balance of more than $145
million to help balance this year's budget.
Quinn has declined to say if the full balances
of all the funds are being swept.
Quinn told the News Service last week that the
administration had identified $92 million in
increased non-tax revenue available to slot into
the revenue column of the budget, but has
declined to be more specific about the source
and nature of that $92 million in health and
human services revenues which appear to have
come into play after the budget was signed.
Boston Magazine
Monday, November 28, 2016
Pay Raises Are Coming to the State House
A $1.3 million bump is on the way for House
staffers
By Spencer Buell
Consider this a helping of Thanksgiving news
dump leftovers.
You may have missed it, but House Speaker Bob
DeLeo announced the day before the holiday that
staffers at the State House are set to receive a
pay bump amounting to around $1.3 million.
The raise is a cost of living increase of about
6 percent for employees working in the House of
Representatives (of which there are 468),
DeLeo’s office said Wednesday. The last such pay
increase came in 2014.
“House of Representatives employees received
salary adjustments based on a two-year annual 3%
Cost-of-Living-Adjustment factor. The
adjustments will be supported by existing
appropriations,” says spokesman Whitney
Ferguson, in a statement to the State House News
Service.
DeLeo and other lawmakers will not be paid more.
The bump comes after the state has made cuts and
enticed government employees to leave their
posts with buyouts as Gov. Charlie Baker’s
administration seeks to close a budget gap of
nearly $300 million.
The Herald found reaction to the announcement to
be mixed.
Chip Faulkner of Citizens for Limited
Taxation says a pay bump is “not right in
this climate,” while Noah Berger of the
Massachusetts Budget and Policy Center says
“paying people a reasonable salary is important
to attract good people to do important work.”
Last year, City Councilors voted to increase
their own pay after a long and uncomfortable
debate. Over at the MBTA, leadership has begun
discussing the possibility of increasing
salaries as a way to recruit talent for top
positions.
The Attleboro Sun-Chronicle
Thursday, December 1, 2016
Attleboro area legislators say House staff
raises warranted
By Shraddha Gupta
Staff at the Massachusetts House of
Representatives will receive a 6 percent pay
raise - their first in two years - and local
lawmakers say the wage hike is long overdue,
despite concerns about a looming budget deficit.
"The individuals who work in the Statehouse are
loyal hard-working people devoted to serving the
citizens of Massachusetts," Rep. Betty Poirier
said of the cost of living raise announced last
week by House Speaker Robert DeLeo.
"They work long hours and haven't had a raise in
two years," said Poirier, R-North Attleboro. "I
am happy that the speaker has decided to give
them a boost."
Rep. Paul Heroux, D-Attleboro, agreed the pay
raise was needed.
"Normal cost-of-living increases are important
for anybody, whether they are in the public
sector, the private sector or even in
retirement," Heroux said.
A total of 468 House employees will benefit from
the raises totaling $1.3 million, according to a
senior aide to the speaker.
It was announced before a virtually empty
Statehouse on the eve of Thanksgiving.
The raise comes amid concerns about the state
budget, which is now projected to have a $294
million deficit.
The administration of Gov. Charlie Baker has
been offering voluntary buyouts to executive
branch employees to reduce expenses - with
incentives of $5,000 to $15,000.
But, DeLeo's office assured that the pay raise
was already cooked into the budget and will not
affect the bottom line.
"House of Representatives employees received
salary adjustments based on a two-year annual 3
percent cost-of-living adjustment factor. The
adjustments will be supported by existing
appropriations," spokesman Whitney Ferguson said
in a statement.
Poirier noted that even with the raise, staff
salaries are not out of line.
"We don't have high-salaried people working in
the Statehouse, and the drain of people to
higher-paid positions has always been an issue,"
she said.
Heroux noted that unlike the federal government,
the state constitution mandates a balanced
budget. A discrepancy arises when revenues don't
come in as expected, and that may result in
cuts.
"There is a difference of opinion with the
state's fiscal condition between the executive
branch and the legislative branch. It's also
important to note that the state has a balanced
budget - and that is what we pass when we pass a
budget," he said.
Noah Berger, president of the Massachusetts
Budget and Policy Center, said he thought the
staff raises were "reasonable," and matched what
he has seen in the private sector.
The center's 2016 "State of Working
Massachusetts" paper for general wage/income
trends concluded that after decades of wage
stagnation for many working people, wages rose
across the income spectrum, both in
Massachusetts and nationally from 2014 to 2015.
During 2016, average wages for the broad middle
class in Massachusetts rose almost 3 percent,
from $21.63 an hour to $22.25, adjusted for
inflation.
Lowest wage workers, who benefited from the
state minimum wage increase in 2014, saw an
increase of more than 7 percent over the past
year, from $9.08 an hour to $9.74, adjusted for
inflation.
The wage increases are aligned with other
positive trends in the state, including steady
job growth and declines in unemployment.
"Paying people a reasonable salary is important
to attract good people to do important work,"
Berger said.
The Attleboro Sun-Chronicle
Monday, December 5, 2016
A Sun-Chronicle editorial
Pay raises send wrong message
If you owned a business and were facing
financial problems, would you be handing out
raises?
Probably not, but that's exactly what
Massachusetts House Speaker Robert DeLeo did.
On the day before Thanksgiving - when the
Statehouse was virtually vacant - DeLeo's office
announced that the 468 employees who work for
the Massachusetts House of Representatives would
be receiving 6 percent "cost-of-living" raises.
The $1.3 million expense will be covered by the
$40.2 million House budget, DeLeo's office said.
What DeLeo didn't say is that the state is
facing a nearly $300 million deficit. Handing
out hefty raises - Social Security recipients
will only be getting a 0.3 percent
cost-of-living increase for 2017 - in the midst
of cutbacks is just not right.
Local legislators from both sides of the aisle
defended the raises.
"The individuals who work in the Statehouse are
loyal, hardworking people devoted to serving the
citizens of Massachusetts," state Rep. Betty
Poirier, R-North Attleboro, said. "They work
long hours and haven't had a raise in two years.
I am happy that the speaker has decided to give
them a boost."
"Normal cost-of-living increases are important
for anybody, whether they are in the public
sector, the private sector or even in
retirement," state Rep. Paul Heroux,
D-Attleboro, said.
This was done just after Gov. Charlie Baker
offered buyouts - with incentives of $5,000 or
$15,000 - to tens of thousands of executive
branch employees. Other budget cuts are
expected.
The timing of the raises troubled some budget
watchdogs.
"Considering they've got a budget shortfall and
they're crying about, 'Where are we going to get
the money,' to come out with a 6 percent raise
is just not right in this climate," said Chip
Faulkner of Attleboro and the Citizens
for Limited Taxation.
"Pay raises should only be considered after
spending, taxes and regulations have gone down,"
Paul Craney of the Massachusetts Fiscal Alliance
said.
Even worse, in our view, is the message that
people close to the center of power - and the
House speaker has long been considered one of
the most powerful people on Beacon Hill - reap
rewards while others lose their jobs. Our
representatives' response also leaves an
impression of legislators who dare not oppose
the speaker for fear of retaliation.
It's not the way you'd run a business, but,
unfortunately, it's the way our state government
has been run for years.
State House News Service
Monday, December 5, 2016
Tax hikes not ruled out as budget process begins
for Fiscal 2018
By Andy Metzger
In 2009 lawmakers raised the sales tax. Four
years later, tax hikes increased the cost of
gasoline and tobacco. Could 2017 be the year for
the next tax hikes?
As the fiscal 2018 budget season kicked off with
a revenue outlook hearing on Monday, state
officials with broad power over state tax policy
did not rule out tax increases, and expressed a
range of perspectives on the idea.
One year ago, after listening to revenue
projections from experts, House Ways and Means
Chairman Brian Dempsey said tax hikes were off
the table for the fiscal 2017 budget - a policy
position quickly adopted by the Speaker Robert
DeLeo as well.
After the same hearing for the fiscal 2018
budget on Monday, where officials predicted a
continuation of sluggish growth in tax revenues,
the Haverhill Democrat declined to take a stand
against new taxes - a stance Speaker DeLeo
underlined.
"No decision has been made in terms of
additional or other forms of revenue," DeLeo
told reporters. He said, "I'm not ruling out
anything."
DeLeo said he wanted to hear from others
involved in the budget, and see how much tax
revenue state officials expect to receive for
fiscal 2018 - a decision likely to be made by
Jan. 15.
"We have a lot to digest after today. And I
think the first order of business is for us to
go back and determine a consensus number. And I
think we're going to be spending the next couple
of weeks looking at what that number would be,"
Dempsey told the News Service when asked if
taxes were on the table. He said, "I'm not
talking about taxes today. I'm talking about
what the revenue projections will be."
Senate Ways and Means Chairwoman Karen Spilka
said tax increases should be talked about in the
future.
"We haven't even gone down there," Spilka told
the News Service. She said, "That's something
that all of us will have to discuss, but that's
not something that we're talking about now by
any means."
Gov. Charlie Baker, a Republican working with a
Democrat-controlled Legislature, said he hoped
to steer state policymakers away from tax
increases.
"I'm going to do the best I can to talk my
colleagues in the Legislature out of raising
taxes. I think we need to get our budget
structurally aligned and balanced," Baker told
reporters on Monday.
Lawmakers last raised taxes in 2013, hiking the
cost of a gallon of gas by 3 cents and a pack of
cigarettes by $1. Four years before that, in the
depths of the Great Recession, lawmakers
increased the sales tax to 6.25 percent, up from
5 percent.
At the revenue hearing Monday, experts'
estimates of state tax revenue growth ranged
from 5.2 percent to 2.65 percent in fiscal 2018.
DeLeo, Dempsey, Spilka and Senate President
Stanley Rosenberg went on record this year
voting for a state constitutional amendment that
would add a 4 percent surtax onto households
incomes above $1 million. The goal is to raise
nearly $2 billion with the intention of funding
transportation and education.
That ballot amendment, which faced opposition
from Republican lawmakers, needs a second
favorable vote in the two-year session beginning
Jan. 4 before it could appear on the 2018
ballot.
Others have discussed a potential increase in
the 3.75 state excise tax on the forthcoming
legalized retail sale of marijuana and
subjecting online room and vacation home rentals
to state taxes.
The Senate in recent years has proved more eager
to revisit tax policies and raise taxes, seeking
a series of changes in 2015 including new taxes
on flavored tobacco. Money bills that change tax
policy must originate in the House, according to
the constitution.
In her opening statement at the revenue hearing,
Spilka said the state had foregone nearly $600
million in revenue in the past two years because
of statutorily mandated, economically triggered
decreases in the income tax rate.
The Department of Revenue estimated that the
income tax rate will drop from 5.1 percent to
5.05 percent on Jan. 1, 2018, resulting in an
$83 million reduction in state tax collections
over the second half of fiscal 2018.
Antonio Caban contributed reporting
State House News Service
Monday, December 5, 2016
Lots of change, but experts see one consistency:
Slow revenue growth
By Colin A. Young
Like mechanics puzzled by a car that runs just
fine but struggles to get up to speed on the
highway, budget writers got under the hood of
the state budget Monday morning, trying to
discern what they need to do to ensure their
spending plans stay on the road in fiscal 2018.
Despite the lowest unemployment rate in 15
years, and heightened consumer and business
confidence, state budget managers have had to
scramble this fiscal year and last to adjust as
state tax collections have not lived up to
initial projections amid a slow-growing economy.
"Do we have any better idea as to why some of
this is happening in an economy, particularly
for Massachusetts, that is doing, by all
indications, well?" Sen. Karen Spilka, the
Senate chair of the Ways and Means Committee,
asked at the outset of the hearing. "I mean,
you'd think that we would be doing well with
withholdings and sales tax and corporate, with
the business confidence the way it is."
The hearing Monday by the Joint Committee on
Ways and Means and the Executive Office of
Administration and Finance was held to answer
questions like Spilka's and ascertain the
availability of tax revenues for fiscal 2018
budget-building purposes.
Lawmakers heard a range of projections from the
Department of Revenue, budget-tracking think
tanks and Massachusetts economists at the annual
hearing. Their estimates came in as low as 2.65
percent and as high as 5.2 percent.
The projections came with a flurry of warnings,
with analysts urging lawmakers to consider how
President-elect Donald Trump's agenda could
affect the state budget picture, how political
and financial instability in Europe might make
waves in Massachusetts, and how the state's
demographics play into its future economic
performance.
DEPARTMENT OF REVENUE
Forecasted fiscal 2018 tax revenue growth: $901
million, or roughly 3.5 percent
Michael Heffernan, commissioner of the
Department of Revenue, gave an uncertain
forecast of state tax revenues in fiscal 2018,
telling state budget writers that the outlook
for next fiscal year is "perhaps even more
uncertain than would normally be the case" due
to economic and political unknowns around the
country and the world.
DOR estimated fiscal 2018 tax collections will
come in between $26.81 billion and $27.104
billion, representing growth of 2.9 to 4 percent
over fiscal 2017 benchmarks. Using the midpoint
of its range, DOR estimated a fiscal 2018
revenue increase of $901 million to $26.957
billion, growth of 3.5 percent.
According to the DOR, its estimate assumes the
income tax rate will drop from 5.1 percent to
5.05 percent on Jan. 1, 2018, resulting in an
$83 million reduction in state revenue. Recent
economic growth was not significant enough to
statutorily trigger an income tax cut on Jan. 1,
2017.
The DOR estimate also assumes that the state
will see no revenue from legal marijuana in
fiscal 2018, which ends 18 months from now or
halfway through 2018. Retail marijuana shops are
not expected to open until 2018.
Making the task of predicting difficult, DOR
officials said, is the uncertainty surrounding
the economic policies of the incoming Trump
administration, instability in Europe due to
Great Britain's decision to leave the European
Union, and the potential for Federal Reserve
interest rate hikes.
"If the U.S. economy slows considerably, the
Massachusetts economy will slow as well. Second,
while there has been a recent bounce in consumer
confidence and in the financial markets, it
would not be prudent to project these as
permanent," DOR Commissioner Michael Heffernan
said. "The level of uncertainty in both the
economic and political spheres remains."
MASSACHUSETTS TAXPAYERS FOUNDATION
Forecasted fiscal 2018 growth: $687 million, or
roughly 2.65 percent
The Massachusetts Taxpayers Foundation on Monday
presented the Joint Ways and Means Committee
with an estimate that state tax collections will
grow by only 2.65 percent in fiscal 2018. Tax
revenues will increase by about $687 million, to
$26.64 billion, according to the foundation's
estimate.
Though the reasons behind the sluggish growth of
the last nearly two years are "uncertain, what
is clear is that there are no indicators
suggesting state tax revenues will grow at a
rate substantially higher than we've experienced
over the last 11 months," MTF President Eileen
McAnneny said.
MTF echoed DOR's concerns, and "advises extreme
caution over the next 18 months and urges
lawmakers to exercise great restraint in
building the budget."
"There are both longstanding causes for concern,
such as a shrinking workforce and insufficient
reserves in our stabilization fund, and many new
ones -- such as the lack of clarity on many
policy positions from President-elect Trump and
ominous signs of a global economic slowdown --
that necessitate a conservative approach,"
McAnneny said. "Given our fragile fiscal state
and our unpreparedness for a recession, our
expectation is that these pressures will only
grow in the coming year."
Closest to home, the state's demographics could
soon begin to limit economic growth, McAnneny
said. As the Baby Boomer generation begins to
exit the state's workforce, there are not enough
young workers entering the working ranks. The
number of Massachusetts residents between the
ages of 16 and 64 peaked in 2015 at 4.59
million, according to MTF, and is expected to
tick downward to 4.45 million by 2025.
And President-elect Donald Trump's stance on
immigration could further stress the state's
workforce. Net international migration has
averaged over 10,000 people per year since 2000,
offsetting the scores of residents who leave the
state and providing a valuable source of workers
for Massachusetts businesses. If Trump's
immigration plans stop that flow, challenges to
economic growth could worsen.
Of Trump's campaign proposals, the ones that
seem most likely to have "significant and
immediate impacts" on the Massachusetts economy,
according to MTF, are the repeal of the
Affordable Care Act, immigration reforms that
could further the contraction of the workforce,
protectionist trade policies and changes to the
Medicaid program.
"Any one of these changes could be sufficient to
cause a significant contraction. I think if you
see a combination of them, they could have a
profound and long-lasting economic consequence
and place more tension on our precarious fiscal
situation," McAnneny said. She added, "There are
just many external forces at play, whether
they're local, national or international, and I
think our fragile fiscal state really suggests
the only prudent course is to exercise great
restraint when you build the budget."
BEACON HILL INSTITUTE
Forecasted fiscal 2018 growth: $1.36 billion, or
roughly 5.2 percent
The Beacon Hill Institute's projections for next
fiscal year were the most bullish that lawmakers
heard Monday. David Tuerck, executive director
of the institute, pegged fiscal 2018 tax
revenues at $27.8 billion, up $1.36 billion or
5.2 percent over fiscal 2017.
"For some reason, we always tend to be more
optimistic," Tuerck said. He added, "So I think
that even though our numbers are on the high
end, in fact much higher than the other numbers
you're getting here today, I'm confident in
them."
Tuerck differed from the others who offered
testimony Monday not just by presenting by far
the most optimistic revenue projection, but also
by suggesting that Trump's policies could be a
boon to the state economy.
"I'm not sure what's going to happen to our
relations to China, I don't know what it's going
to cost to build a wall, but I find nothing but
encouraging news in the Trump economic plan," he
said. "Getting rid of the Clean Power Plan,
revising Dodd-Frank, revising the Affordable
Care Act, in particular cutting the tax on
business profits to 15 percent can't have
anything except an exuberant effect on the
economy."
ALAN CLAYTON-MATTHEWS and MICHAEL GOODMAN
Forecasted fiscal 2018 growth: $971 million, or
roughly 3.7 percent
Northeastern University economist Alan
Clayton-Matthews was the Goldilocks of Monday's
hearing, presenting an fiscal 2018 revenue
projection that was "just right" compared to
those from MTF and the Beacon Hill Institute, he
said.
Clayton-Matthews estimated that revenues will
rise $971 million, or 3.7 percent, to $27.27
billion in fiscal 2018.
He said that while last month's presidential
election is still reverberating through the
economy, the election of Trump could lead to a
more positive outlook for the national economy,
pointing to upticks in financial markets since
Nov. 8.
"Economic uncertainty related to the election is
still high, but in the short term there has been
a significant shift from predominantly downside
risk to predominantly upside risk. You can see
the Wall Street Journal monthly survey of
economists to see that, the difference between
before and after the election was quite
substantial," he said. "The prospects of fiscal
stimulus could boost economic growth beyond that
in the outlook on which this revenue forecast is
based."
Michael Goodman, co-editor with Clayton-Matthews
of Massachusetts Benchmarks, said he concurs
with Clayton-Matthews' projection, and
highlighted high utility rates, the K-12
educational achievement gap, local zoning
regulations that limit affordable housing stock
and climate change as potential future
challenges.
"In many respects the Commonwealth is as well
positioned as any place in the nation to ride
out whatever comes next and there are a number
of good reasons to be optimistic," Goodman said.
"But I do think that it's important for you to
carefully consider the risks that are in the
economic outlook and the state's long-term needs
before arriving at your consensus revenue
estimates and preparing your budget for FY '18."
The Boston Herald
Wednesday, December 7, 2016
Have funds, will travel for those on the dole
By Howie Carr
Massachusetts’ EBT card holders are spending
welfare cash in all 50 states, Puerto Rico and
the Virgin Islands, while patronizing or at
least accessing ATMs in liquor and tobacco
stores, beauty salons and tattoo parlors.
In response to my public records request, the
state’s Department of Transitional Assistance (DTA)
turned over 18 months of EBT records from Jan.
1, 2015, to July 1, 2016.
In all, the taxpayers shelled out $321 million
in Temporary Assistance to Needy Families (TANF)
to welfare recipients.
In the 18-month period, more than $7.3 million
in Bay State welfare funds were spent outside
the state, including $2.4 million in New
Hampshire, $780,000 in Connecticut and $549,000
in the Sunshine State of Florida.
In that period, Mass. EBT cards were also used
1,335 times in Puerto Rico to access more than
$110,000 in welfare cash.
State Rep. Shaunna O’Connell (R-Taunton) has
long campaigned in the Legislature against
welfare fraud and abuse.
“I continue to advocate for an end to
out-of-state usage and to limit cash access,”
she said. “Taxpayer-funded EBT cards should not
be paying for vacations. The state should revoke
cards used out of state.”
Another $134,000 in welfare cash was accessed in
the cities and towns around Walt Disney World in
Florida, more than $11,000 in Las Vegas and
another $2,289 in Hawaii.
Welfare recipients also accessed $2,054 in
Atlantic City, N.J., and another $2,144 in
Uncasville, Conn., home of the Mohegan Sun
casino, including $600 accessed at 1 Mohegan Sun
Blvd.
TANF benefits, which are basically cash, are
supposed to go only to the state’s neediest
residents. The program was formerly known as Aid
to Families with Dependent Children (AFDC).
EBT cards also provide money from a different
fund, the Supplemental Nutritional Assistance
Program (SNAP), which used to be known as food
stamps.
Eligibility for TANF benefits enables a
recipient to access a number of other welfare
programs, including Mass Health.
The records provided by the DTA do not
differentiate between actual spending at the
businesses, or whether those on the dole just
accessed ATMs at the addresses.
In the 18-month period, state welfare recipients
accessed nearly $100,000 at liquor stores across
New England. At one liquor store in Lawrence,
there were three separate $500 withdrawals on a
single day in January 2015.
Welfare recipients accessed $7,800 at a liquor
store in Springfield, $7,706 at one in Lakeville
and $6,586 at another package store in Fall
River.
State law prohibits those on the dole from
squandering their handouts on alcohol, tobacco
or tattoos. Spending on pet food is allowed;
welfare recipients accessed over $2,200 at
various pet stores over the 18-month period.
In response to an inquiry, the DTA said that if
the agency suspects welfare cash is being spent
on prohibited items, a “site inspection” is
conducted.
“If an establishment is determined to be
predominantly an establishment which sells
liquor or other prohibited items,” a DTA
spokesman said in an email, “DTA will block EBT
transactions from being accepted through their
(point of sale) system and/or any ATM on their
premises.”
The spokesman said DTA recorded 308 “intentional
program violations” by various stores over the
18 months.
“Many of these purchases are illegal,” O’Connell
said, “and should cause cards to be suspended.”
Other findings from the DTA’s public records:
• $22,700 in welfare funds for “needy families”
was accessed at stores with the words “Tobacco,”
“Smoke,” “Cigar” and “Cigarette” in their names,
including stores in Pineville and Cut Off, La.,
Moultrie, Ga., as well as stores in North
Carolina, Tennessee and Alabama.
• Almost $10,000 was accessed in one tobacco
store in Dorchester alone.
• About $19,000 cash was accessed in beauty
stores and nail salons, mostly in Boston and
other urban areas in Massachusetts, but also
including four in Brooklyn and two in the Bronx.
• More than two dozen bars, clubs and taverns
have recorded EBT transactions totaling $7,200
with lounges in Lawrence and Springfield leading
the way.
• An EBT tab of $14 was run up at a Pennsylvania
lounge called “the Swingers’ Club.”
• More than $4,500 in state welfare benefits
were accessed at one jewelry store in
Springfield, Conn.
• Massachusetts welfare recipients spent nearly
$6,000 in the Virgin Islands, including $1,374
at a single restaurant in St. Thomas. A woman
who answered the phone there Monday said the
restaurant has an ATM.
Follow the money
The state’s Department of Transitional
Assistance (DTA) turned over 18 months of EBT
records from Jan. 1, 2015, to July 1, 2016, and
this is what the data showed:
$134,000 in welfare cash was accessed in the
cities and towns around Walt Disney World in
Orlando, Fla.
$110,404 in Puerto Rico
$11,404 in Las Vegas
$2,054 in Atlantic City, N.J.
$2,289 in Hawaii
$2,144 in Uncasville, Conn., home of the
Mohegan
Sun casino
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